Quantamize Midday Market Update April 9

Apr 09, 2018
US Markets Midday Review

US equities are broadly higher, extending this morning’s gains. Positive sentiment is a response to the President’s comments yesterday in a tweet in which he reiterated a softening of his hardline on Sino-American trade. Additionally, speaking this morning, he stated that he would make an important announcement regarding Syria this afternoon. The VIX is down to 20.70 (-3.72%), indicating easing market uncertainty.

The S&P 500 moved 1.52% higher, with 456 companies advancing (43 declines). Technology is driving today’s rally following Friday’s poor finish. Large-cap technology is mixed with information technology up 2.81%, but telecommunications (-0.08%) relatively flat. Telecommunications are the only sector in negative territory. Healthcare (+2.02%) is an outperformer, led by pharmaceuticals & biotechnology (+2.50%). Financials are up 2.0%, with banking (+2.38%) the catalyst. Consumer stocks advanced broadly as consumer discretionary and consumer staples gained 1.25% and 0.48% respectively. Energy and industrials have risen more than 1%.

The Nasdaq Composite is up 2.22%, outperforming the S&P 500 and Russell 2000. Strong returns from semiconductors are lifting tech higher. Large and small-cap semiconductor stocks are up 3.84% and 2.46%, respectively.  

Russell 2000 stocks are up 1.11%, as small-cap stocks underperform the broader market. Healthcare (+3.56%) is the biggest outperformer, due to strong returns in biotechnology (+6.31%). Russell 2000 technology (+1.88%) performed strongly, relatively in-line with the broader tech sector. Consumer staples edged 0.07% higher, while consumer discretionary moved up 0.51%. No sectors in the Russell 2000 are negative.

Stocks Trending in the News

APPLE (AAPL) will be selling a new red version of its iPhone 8 and iPhone 8 Plus. Apple shares are up 2.66%.

Boeing (BA) shares are 0.94% higher after securing a $12 billion deal with American Airlines, entailing the provision of 47 new Dreamliner jets.

FACEBOOK (FB) CEO, Mark Zuckerberg, stated that he was responsible for Facebook’s privacy breach, saying that Facebook did not do enough, and that it was his mistake. Zuckerberg also added that the company is increasing its investment in security. Facebook shares are up 1.88%.

HNA Tourism Group is selling 63 million shares of HILTON WORLDWIDE (HLT). The sale is expected to take place on April 11th. Hilton shares are down 0.10% today.

LEUCADIA NATIONAL CORP. (LUK) is reorganizing its business by selling stakes in two non-financial companies for $1.33 billion. Leucadia is also renaming itself Jefferies Financial Group. Leucadia shares are up 12.22%.

MERCK (MRK) saw a surprising positive test result from its lung cancer drug Keynote-042. Merck shares are up 6.60%.

S&P 500 Gainers

  • LUK +11.76%
  • NKTR +6.45%
  • MRK +5.64%
  • AMAT +4.41%
S&P 500 Laggards
  • UAA -2.12%
  • NEM -2.11%
  • GPS -1.33%
  • KMX -1.31%
Russell 2000 Gainers
  • AVXS +81.43%
  • RGNX +21.88%
  • ABEO +15.71%
  • NYNY +14.32%
Russell 2000 Laggards
  • NMIH -21.19%
  • ESNT -15.59%
  • RDN -14.79%
  • MTG -14.27%
 Latin American Equities

Latin American equities are mixed today following an appetite for risk to start off the trading week. Brazil’s Ibovespa is down 66bps, Argentina’s Merval is up 58bps and Mexico’s Mexbol was up 61bps. Uncertainty is high in Brazil remains as previous frontrunner, Lula, for the upcoming presidential election has just begun his prison sentence. Inflation data from Mexico today showed a slight slowdown. The march reading was 5.04% Y/Y, down from 5.34% Y/Y in February and lower than the 5.11% Y/Y forecasted by economists. Mexico’s central bank is set to meet this Thursday, and economists expect them to hold rates steady. The slowdown in inflation should support that decision, and the central bank’s next expected hike is in June. Colombia is set to hold presidential elections at the end of next month, and Ivan Duque is currently leading Gustava Petro in the latest polls. Lastly, Mexican Economy Minister Ildefonso Guajardo said today that he sees an 80% chance of a NAFTA agreement by the first week of May. The US was making references to having a deal reached by April 13th, the first of two days of the Summit of the Americas in Peru, however, this appears to be unlikely now.

Rates & Commodities

US bonds are slightly lower as of midday as investors seem to have a risk on sentiment despite uncertainties on the horizon this week (US-China trade conflict, US involvement in the Middle East and NAFTA discussions). The 10-Year yield is at 2.801%, lower from today’s open of 2.792% and the US 30-Year Yield is at 3.043% from today’s open of 3.032%. The USD$ is lower today by 26bps, breaking below 90.0 for the first time since April 4th. The USD$ is notably sharply higher +3.88% against the RUB? (60.32) following global sanctions on Russia due to their involvement in the UK nerve agent attack. Precious metals are trading higher today with gold up 3bps at USD$ 1333.45/ounce, silver up 46bps at USD$ 16.35/ounce palladium up 187bps at USD$934.56 and platinum up 382bps at USD$939.93. WTI Crude oil is trading higher, up 205bps at USD$ 63.33, following USD$ weakness and an upcoming announcement on the Middle East by President Trump by the end of day. Oil data from IEA and OPEC will be released this week.

Cryptocurrencies

Major cryptocurrencies are mostly lower as of midday. The big five; Bitcoin USD$6,742.29 -4.22%, Ethereum USD$396.23 -0.70% and Ripple USD$0.4848 -2.32% Bitcoin Cash USD$637.70 -2.52% and Litecoin USD$114.90 -2.16% are all trading lower. There are some positive movements out of the top 25 cryptocurrencies by market capitalization; NEO +6.81%, VeChain +4.53%, and Verge +5.81% are notably higher. Salesforce, reportedly is working on a product based on blockchain technology. Salesforce CEO Marc Benioff started thinking about implementing blockchain into his company after attending the World Economic Forum this January. Lewis Ranieri, the father of mortgage-backed securities has partnered with blockchain startup Symbiont. His firm, Ranieri Solutions, is hoping to bring improvements to the mortgage industry. Xiong'An Global Blockchain Innovation Fund, is a Chinese blockchain fund that has just been funded partially by the Chinese government. Thirty percent of the USD$1.6bn raised is from the Hangzhou city government. Lastly, the IOTA foundation has just hired Dr. Rolf Werner, who was the Head of Central Europe at Fujitsu. This move follows another notable hire from the Iota Foundation; Johann Jungwirth was recently hired by IOTA where he previously was the Chief Digital Officer.